The Self-Employed Payroll Process Simplified
Managing your own payroll and taxes as a self-employed individual does not have to be a daunting task. When you have the right tools, knowledge, organization skills, you’ll have no problem staying on top of your finances. If you want to know where to start, we give you a step-by-step process on how you can go about creating your own payroll process as a self-employed individual without having to pay hefty fees. All it takes is an app that can help you generate your own check stubs and tax forms and one that can help you store all these documents. Learn more about our self-employed payroll process or you can check out our simple payroll maker for yourself beforehand.
How to Go About Your Self-Employed Payroll Process
- Calculate Your Earnings – Make sure to calculate the money your make from your business minus any expenses you had related to it. You must keep records of your income and expenses so that you can calculate your earnings accurately.
- Determine Your Tax Obligations – After calculating your earnings, you will need to determine your tax obligations. As a self-employed individual, you are responsible for paying self-employment taxes, which include Social Security and Medicare taxes. You can calculate these taxes by using our self-employed free paystub generator.
3. Set Up a Self-Employed Payroll System – Your payroll system should include a separate bank account for your business and another system to keep track of your income and expenses. There are a variety of online tools you can use to keep track of your financial records, like a payroll software.
4. Pay Your Taxes – After your payroll system is all set up, you need to pay your taxes. This includes paying self-employment taxes on a quarterly basis, as well as any other taxes that may be required. You must always stay on top of your tax obligations to avoid penalties and interest charges.
5. Stay Organized and Keep Records – Finally, it’s important to stay organized and keep accurate records of your income, expenses, and taxes. Not only does this make your payroll process easier, but it will also come in handy in case you get audited
If you don’t have the means to pay a huge amount of money for an accountant or an expensive payroll software, there are different cost-efficient options that will still help you keep track of your finances. PayCheck Stub Online has a payroll app that makes it easier for self-employed individuals to create check stubs for record keeping or proof of income purposes. Once you make an account, the record of your pay stub will stay on the system, so you can go back to it should you need another copy. What’s great about our app is that you can have a copy of your document without a watermark for as low as $7.95.
So, what are you waiting for?
People Also Ask About Self-Employed Payroll
The IRS classifies individuals as self-employed if they fall in the following categories:
- Handling a trade or business as a sole proprietor or an independent contractor
- Being a member of a partnership that carries on a trade or business
- Being otherwise in a business for yourself (this includes part-time work)
In general, the IRS requires self-employed individuals to file an annual return and pay estimated tax quarterly. Learn more about your tax obligations as a self-employed professional.